May 12, 2016

APS changes leave audit staff out of work

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Albuquerque Public Schools

When told earlier this week that Albuquerque Public Schools would not be completely eliminating her department, Director of the Internal Audit office Peg Koshmider said it was news to her.

Albuquerque Public Schools

Albuquerque Public Schools

Koshmider told NM Political Report  APS told her department they would no longer be employed by the school district after June.

“We all got letters of termination,” Koshmider said.

Koshmider said her last day at APS is June 30 and she still isn’t sure whether APS will look to move the three employees she oversees to other positions within APS. Koshmider said she herself may end up unemployed and drawing from what she has paid into her retirement fund—even if she “certainly wasn’t intending to retire” before she received the letter of termination.

State Auditor gets involved

The confusion over whether the the office may shut down appears to stem from an email from Koshmider to a staff member from the New Mexico Office of the State Auditor. Through an open records request, NM Political Report obtained a string of emails that led a statewide elected official to raise concerns directly to APS Superintendent Raquel Reedy about the pending closure of the district’s independent audit office.

In response to a state senior auditor, regarding a separate matter, Koshmider apologized for her delayed response and said she was recently informed of her department’s closure.

“I received your e-mail and as you know I was on leave,” Koshmider wrote. “When I got back I was informed my department was being closed.”

Two days later, State Auditor Tim Keller sent a letter to Reedy and raised his concerns with the office closing.

“The fact that APS has a strong Internal Audit division allows the OSA to refer complaints it receives to the division with confidence that they will be handled appropriately,” Keller wrote. “If Internal Audit is broken up, depending on the circumstances, the OSA may refer these matter to APS’ annual financial auditor or use OSA authority to require special audits in order to thoroughly examine allegations.”

Keller went on to say that each future special audit could cost APS “tens of thousands of dollars”

“Pursuant to state law, APS is required to pay the costs of both the annual financial audit and any special audits conducted,” Keller wrote.

APS claims a ‘strengthened’ audit division

In a letter to Keller on May 5, Reedy said the Internal Audit division was not being shut down, but actually strengthened.

“In an effort to reassure you and the public that the APS Internal audit functions are not being diminished, but in fact are being strengthened, I’ve included a detailed explanation of our reorganization and its implications across the board,” Reedy wrote.

Attached to her letter was a document titled, APS Central Office Restructuring: A Closer Look, which stated that the restructuring “aligns with goals outlined in the developing Academic Master Plan with a focus on students and schools.”

“Relocating and reorganizing the Internal Audit Office,” was listed as one of the changes “resulting in about $4.6 million in savings” for the upcoming school year.

The document goes on to outline what types of changes can be expected and how the Internal Audit Unit will be structured. These are some of the bullet points included:

  • The Internal Audit Unit will be relocated to the Accounting Office. The Unit is supervised by the District Controller who, for internal audit purposes, reports to the superintendent and meets with the Audit Committee of the Board of Education.
  • The unit’s work will be supervised by the District Controller, a certified Public Accountant (CPA) and Certified Fraud Examiner (CFE). The District Controller is the primary contact for the Office of the State Auditor.
  • The District Controller in the controller capacity reports to the Chief Financial Officer. The District Controller in the internal audit capacity reports to the Superintendent and meets with the Audit Committee of the Board.
  • One position formerly in the Internal Audit Office will be moved to the Student, Parent, Employee Service Center to continue management of Ethical Advocate, the district’s anonymous tip line for reporting fraud, waste and abuse.
  • Two positions, formerly in the Internal Audit Office will be eliminated.

In a statement to NM Political Report, Keller reiterated his concern with dismantling the APS internal audit function and acknowledged Reedy’s response. Keller added that his office will keep an eye on the restructuring process.

“Since our engagement on this issue, we received an updated plan from APS that expresses a commitment to restructuring the office in a way that touches on several of these concerns,” Keller said. “Our office will closely monitor how this proposal is implemented to determine if APS will be able to appropriately deal with internal fraud, waste and abuse.”

The APS communication office did not respond to  phone or email messages inquiring whether the restructuring effort would include any current Internal Audit staff or why they were issued termination letters.

Koshmider said she would have liked to stay within the division adding, “I had some goals here that I wanted to see fulfilled.”

Joey Peters contributed to this report.

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